End-use demand is forecast to support hot rolled coil sales but at significantly decreased prices, say some Italian service centre sources. Despite the sluggish flat steel market throughout the entire local value chain, real consumption is said to be sustaining.
Sources tell Kallanish the current steep decline in HRC prices is mostly the result of speculation in recent months that ballooned prices to unprecedented levels. One service centre says his customers are refusing to pay for high-priced sheet “out of principle”. Demand is seen gradually returning to pre-Covid-19 levels. Service centres say shipment levels are satisfactory in May despite the slow market.
Domestic material prices continue to fall amid a market standoff created by economic uncertainty. Domestic contracts are now at €1,000-1,050/tonne ($1,066-1,119/t) base ex-works. Prices are forecast to go below this level in the coming days, towards €970-980/t base ex-works, including from other European producers. Local producers are officially asking for €1,100/t base ex-works but willing to negotiate, sources say.
HRC is offered from the Far East at €870-950/t cfr Italy for July loading but “nobody is buying anyway, apart from some small lots”, a buyer comments. Sources believe prices will bottom out when European producers reduce their levels to €900/t base ex-works.
Natalia Capra France